Cugnot's invention initially saw little application in his native France, and the center of innovation passed to Britain, where Richard Trevithick was running a steam-carriage in 1801. Such vehicles were vogue for a time, and over the next decades such innovations as hand brakes, multi-speed transmissions, and improved speed and steering were developed. Some were commercially successful in providing mass transit, until a backlash against these large speedy vehicles resulted in passing laws that self-propelled vehicles on public roads in Britain must be proceeded by a man on foot waving a red flag and blowing a horn. This effectively killed road auto development in the UK for most of the rest of the 19th century, as inventors and engineers shifted their efforts to improvements in railwaylocomotives. The red flag law was not repealed until 1896.

The many varieties of automobile racing collectively constitute one of the most popular categories of sport in the world.

The large scale, production-line manufacturing of affordable automobiles was debuted by Oldsmobile in 1902, then greatly expanded by Henry Ford in the 1910s. Early automobiles were often referred to as 'horseless carriages', and did not stray far from the design of their predecessor. Through the period from 1900 to the mid 1920s, development of automotive technology was rapid, due in part to a huge (hundreds) number of small manufacturers all competing to gain the world's attention. Key developments included electric ignition and the electric self-starter (both by Charles Kettering, for the Cadillac Motor Company in 1910-1911), independent suspension, and four-wheel brakes.

By the 1930s, most of the technology used in automobiles had been invented, although it was often re-invented again at a later date and credited to someone else. For example, front-wheel drive was re-introduced by Andre Citroën with the launch of the Traction Avant in 1934, though it appeared several years earlier in road cars made by Alvis and Cord, and in racing cars by Miller (and may have appeared as early as 1897). After 1930, the number of auto manufacturers declined sharply as the industry consolidated and matured. Since 1960, the number of manufacturers has remained virtually constant, and innovation slowed. For the most part, "new" automotive technology was a refinement on earlier work, though these refinements were sometimes so extensive as to render the original work nearly unrecognizable. The chief exception to this was electronic engine management, which entered into wide use in the 1960s, when electronic parts became cheap enough to be mass-produced and rugged enough to handle the harsh environment of an automobile. Developed by Bosch, these electronic systems have enabled automobiles to drastically reduce exhaust emissions while increasing efficiency and power.

In almost every nation, laws have been enacted governing the operation of motor vehicles. Most of this legislation, including limits on allowable speed and other rules of the road, are designed to ensure the smooth flow of traffic and simultaneously protect the safety of vehicle occupants, bicyclists, and pedestrians.

In 1965, in California, legislation was introduced to regulate exhaust emissions, the first such legislation in the world. Answering this new interest in environmental and public safety issues, the Department of Transportation (DOT) and the Environmental Protection Agency (EPA) both introduced legislation in 1968 which substantially altered the course of automotive development. Since the US market was the largest in the world (and California the largest market in the US), manufacturers worldwide were forced to adapt. For the first time, safety devices were mandatory, as were controls on harmful emissions. Prior to this legislation, even seat belts were considered extra-cost options by many manufacturers. Other countries followed by introducing their own safety and environmental legislation. In time, meeting regulations became the main challenge for the engineers designing new cars. In the decade from 1975 to 1985, the world's manufacturers struggled to meet the new regulations, some producing substandard cars with reduced reliability as a result. However, by the end of this period, everyone had learned how to handle the newly regulated environment. The manufacturers discovered that safety and environmentalism sold cars, and some began introducing environmental and safety advances on their own initiative.

Among the first environmental advances are the so-called alternative fuels for the internal combustion engine, which have been around for many years. Early in automotive history, before gasoline was widely available at corner pumps, cars ran on many fuels, including kerosene (paraffin) and coal gas. Alcohol fuels were used in racing cars before and just after World War II. Today, methanol and ethanol are used as petrol extenders in some countries, notably in Australia and the United States. In countries with warmer climate, such as Brazil, alcohol derived from sugar cane is often used as a substitute fuel.

In many countries, plentiful supplies of natural gas have seen methane sold as compressed natural gas (CNG) and propane sold as liquified petroleum gas (LPG) alongside petrol and diesel fuels since the 1970s. While a standard automotive engine will run on these fuels with very low exhaust emissions, there are some performance differences, notably a loss of power due to the lower energy content of the alternative fuels. The need to equip filling stations and vehicles with pressurized vessels to hold these gaseous fuels and more stringent safety inspections means that they are only economical when used for a long distance or if there are installation incentives. They are most economical where petrol has high taxes and the alternative fuels do not.

With heavy taxes on fuel, particularly in Europe and tightening environmental laws, particularly in CaliforniaUSA, and the possibility of further restrictions on greenhouse gas emissions, work on alternative power systems for vehicles continues.

Diesel-powered cars can run with little or no modification on 100% pure biodiesel, a fuel that can be made from vegetable oils. Many cars that currently use gasoline can run on ethanol, a fuel made from plant sugars. Most cars that are designed to run on gasoline are capable of running with 15% ethanol mixed in, and with a small amout of redesign, gasoline-powered vehicles can run on ethanol concentrations as high as 85%. All petrol fueled cars can run on LPG. There has been some concern that the ethanol-gasoline mixtures prematurely wear down seals and gaskets.

Attempts at building viable battery-powered electric vehicles continued throughout the 1990s (notably General Motors with the EV1), but cost, speed and inadequate driving range made them uneconomical.

Current research and development is centred on "hybrid" vehicles that use both electric and combustion (pollution) power, and longer-term efforts are based around electric vehicles powered by fuel cells.

Every year more than a million people are killed and about 50 million people are wounded in traffic (according to WHO estimates), either by crashing into something, or by being crashed into. Major factors in accidents include driving under the influence of alcohol or other drugs, inattentive driving, overtired driving, road hazards such as snow, potholes and animals, and reckless driving. Special safety features have been built into cars for years, some for the safety of car's occupants only, some for the safety of others.

There are standard tests for safety in new automobiles, like the EuroNCAP. Despite these technological advances, the death toll of car accidents remains high: about 40,000 people die every year in the US, a number which increases annually in line with rising population and increased travel (although the rate per capita and per mile travelled decreases steadily), with similar trends in Europe. The death toll is expected to nearly double worldwide by 2020. A much higher number of accidents result in injury or permanent disability.